It’s tax time again!

BY FAZAAD BACCHUS

Today I would like to discuss some of the T slips that you have been receiving, what they mean and how to use them. Any explanations do not constitute tax advice and you are encouraged to seek out a tax professional especially for complex tax issues.

Let’s start with the one that most persons are familiar with, your T4 slip. As an employee you should be receiving this slip. It states your employer’s name, your name, address and social insurance number, what your employer paid you, how much income tax was deducted, how much employment insurance and CPP contributions were deducted on your behalf. You should receive this slip before the end of February and if you don’t, you can always ask your employer for a duplicate copy. If unable to retrieve it from your employer, you may also register with CRA and view your slips on line. Failing to obtain a slip is no excuse to not file your returns, add up your pay slips and make an estimate and use it to file.

If you are self employed you will receive a T4A slip which generally has the same information with a few exceptions. As a self employed or commissioned individual there will be no employment insurance deducted and a self employed person is also responsible for the entire CPP required contribution. T4A slips also report income such as certain portions of pensions, retirement and annuities.

If you are retired and claiming your OAS benefits you should be receiving a T4A (OAS), this is taxable benefit to you, and you may request of Service Canada to make a deduction every month to cater for this tax. Remember that the OAS has a claw back threshold when your net income reaches $79,054.

If you are receiving CPP benefits, you should be receiving a T4A (P). This statement shows what you have received, what taxes at source was deducted and what source it’s from, whether it’s due to you receiving your pension or whether its disability claims, survivors benefit, child benefit, or even as far as stating the death benefit on a final return. The max CPP benefit for 2020 is $1,175.83 per month; however it is based on your contributions.

Are you in between jobs and have been receiving employment insurance benefits, then you should be receiving a T4E. It should state the amount received, the various categories and any income tax deducted.

Another slip which one should also become familiar with is the T4RIF slip. All LIF’s and RRIF’s are taxable income, therefore your slip will indicate the amount you received and the amount of taxes deducted at source. A point to note is that the taxes deducted at source may not be the amount owed, but just the withholding amount, so please bear that in mind when filing.

And finally, the T4RSP which shows your contribution to your RRSP and the amount your taxable income will reduce by. Take advantage of this benefit.